Magnitude Matters

Wednesday, May 23, 2018

With two important cases working their way through the courts (Jenkins v. NCAA and Alston v. NCAA), I continue to be optimistic that we are witnessing the beginning of the end for the government-protected, exploitative monopoly.

Just as Patrick Hruby explains in this Deadspin article, I have always found the argumentation along the lines "define specifically and prove explicitly how this change will work" to be shallow and weak. To argue that you lack the imagination to assume the market can devise a way to pay athletes, is no argument at all. As he concludes,

College athletes don’t need a pay-for-play plan, because pay-for-work isn’t a quantum leap. It’s just a small step in the direction of the world the rest of us already inhabit. The NCAA loves to talk about how college sports prepare players for The Game Of Life. There’s an easier and much more just way to do that.

As Ziggy might say, you'd have to have a Swiss cheese mind to not believe solutions will be discovered.

While we are on the topic of the ridiculous, Andy Schwarz takes apart the contention that most colleges couldn't afford to pay a market price for athletes.

Sunday, May 20, 2018

Trying to get back into the swing of blogging and just beating the 90-day hiatus limit . . .

Looking through my saved articles for future linking, I notice that just about all of them can be labeled "counter-conventional wisdom". Here are a few that, yes, have some age on them in the world of "that's so yesterday's Twitter", but I think they have value enough to be shared.

David Friedman, whose latest book is on my to read list, wrote about attending a Jewish wedding which got him thinking about what I would call modernity-biased myths about the past. I particularly like the Columbus myth.

You can't go very long discussing cryptocurrencies with a skeptic before they bring up the supposed Tulip Mania of 1600's Netherlands. But as I believe I've posted (or intended to) before, this is a myth. Hat tip to Tyler (of course).

Sunday, February 18, 2018

Seriously?!? You clicked thinking you'd find some nonsense about, say, money about to [do something in regards to] "the sidelines", or perhaps you wanted to know how many technical indicators were crossing arbitrary thresholds. Oh, maybe it was an insider's take on smart money that you sought. But what would make the traders behind it "smart", how would I know what "they" (in unison? all on the same side of each trade?) were doing, and if I did, why would I share it?

Markets recalibrate constantly to new information. They also recalibrate constantly to changes in the weighted-average risk appetite of market participants. Did something change over the past couple of weeks? Of course, there is always something changing. But what?...

John Cochrane offers a great post for that question. Short answer: nobody knows. It cannot be known.

But what if we're in a bubble? Yeah, about that... Scott Sumner has two recent posts on that topic and more. He suggests we not be so sure about labeling past prices bubbles and lower the status of pessimists (I agree). He also suggests we should not offer explanations for events for which we are ignorant (I agree).

The standard advice is still the best advice:

Set your asset allocation as appropriate for best achieving your goals and personal constraints.

This links post is comprised of several items I believe are linked together in theme or subject matter. See what you think...

First Don Boudreaux points to a great website and corresponding TED talk by Anna Rosling Rönnlund. The project is a photographic-based exploration of how people compare. The within-country and among-country comparisons highlight what wealth and poverty look like. Notice the similarities, notice the differences, and notice on what factors these things do and do not seem to correlate.

Steven Pinker makes a strong case that The Enlightenment Is Working--"Don’t listen to the gloom-sayers. The world has improved by every measure of human flourishing over the past two centuries, and the progress continues." Let's suppose you conducted a survey every year for the past two centuries asking people simply, "Are you better off today than last year?" My guess would be the average and very typical response would be hard to distinguish from 'basically no improvement'. YET, the improvement over that time span for all of humanity (not just the average but for EVERY cohort) is dramatic and undeniable (once you look at the evidence). Why might this paradoxical result occur?...

Part II of Russ Robert's The Numbers Game is an examination of economic progress which suggests answers to the prior question above. The subtle yet very dramatic, counter-intuitive lesson, Simpson's Paradox, is awesome. To be sure, Simpson's Paradox would not answer my hypothetical, but it relates to how we misperceive small but compounding change and growth. Also, don't miss the first installment of Russ's video series.

But wait, aren't there too many people (or soon will be) for all this good news to continue? Steven Landsburg explores this issue in this video. He starts where everyone should start but often does not by asking "How would we know?" I believe he makes a very strong case that the answer is 'NO' we don't have and will not have "too many" people.

Tyler Cowen pointed to a couple of posts by Katja Grace who ponders 'Why did everything take so long?' The first and second both cover how and why progress is so difficult.

In this James Altucher podcast Dr. Aaron Carroll explores some of his book The Bad Food Bible: How and Why to Eat Sinfully. Quit looking for magic food. Quit worrying about toxic food. Eat what works for you. Stay away from processed foods and too much (i.e., added) sugar.

Slate explores the implications of the junk science used to ban smoking on grounds of secondhand dangers. I believe we are in an age of rising puritanism. Tobacco is the drug in the cross hairs. It is low brow. Interestingly alcohol and marijuana are higher and rising status. Once again, mood affiliation and out-group shaming guides public policy. (HT: Robin Hanson)

On a more upbeat note, here is a great guide to finding a restaurant. Lots here about correctly interpreting the signals being given--both intentional and unintentional. (HT: Tyler Cowen)